Capital gain taxes are levied whenever you sell a property. This can impact businessmen involved in property investment. That is why many realtors and business property investors look up to 1031 exchange.
The 1031 exchange allows realtors and business property investors to sell an old property and purchase a new property while deferring capital gain taxes. To do this, the owner of the property should purchase a property that is either equal or higher in the value of a selling property. The owner of the property must also hire a Qualified Intermediary (QI), who will purchase a new property for the owner as directed.
Fractional ownership of real estate can be described as a share in the ownership of a real property. It is usually seen when a property is too expensive, too big to be managed by an individual or any other legal reason. The property can be owned by 5 people, where each person shares the maintenance, taxes, and takes the turn to become the owner of the property.
Exchange fractionally owned real estate property is becoming a popular and effective business tool. But, it also comes with it is also extremely technical and maybe a task risk.